Why a Good Credit Score Unlocks Many Benefits for Your Employees

According to Fair Isaac Corporation, better known as FICO, the creators of the respected credit scoring system, 1 in 4 consumers – nearly 43.4 million people – have a credit score of less than 600, which is considered ‘poor.’ In addition, the consulting firm Oliver Wyman noted that 19% of Americans are “credit invisible,” meaning that they don't have any credit record.

Those who have a low credit score or no credit score live in a world where, oftentimes, they are shut out of opportunities those with solid credit might take for granted. Everything from renting a home, to accessing a reasonably affordable loan, to financing a new cell phone at a lower interest rate, might not be options for those who fall in the “bad credit" or “subprime” category. In fact, poor credit can severely impact one’s ability to even get to work as it has a negative effect on auto insurance and auto financing. 

They say that knowledge is power. But 1 in 4 Americans have not checked their credit score in the last year. 

It was the renowned author James Baldwin who once said, “it’s expensive to be poor.” This couldn’t be more relevant among people with low or no credit score. According to a study from Syracuse University, having poor credit can cost an estimated $590 per year on homeowners insurance, over $9,000 on a car purchase, and a whopping $48,000 on college tuition payments due to less favorable interest rates. 

It’s no wonder collectively we have such low credit scores. Families today in the U.S. are piling up record debt and having trouble paying their bills on time. 

As of the first quarter of 2025, Americans collectively held approximately $1.18 trillion in credit card debt. About 1 in 6 (17%) Americans aren't able to pay all their bills on time, according to new data from the Federal Reserve. For low-income households, that jumps to 1 in 3.

So it becomes even more imperative to ensure your credit score does not prevent you from living your best financial life. After all, having good credit can be a lifechanger. It serves as a major step to living the American dream that includes such milestones as affording a house or paying for college.

So what can be done to help your employees boost their credit score and avoid the financial pitfalls that are associated with bad credit? There are a number of solutions and products to offer your employees as part of a financial wellness benefits package that can help them on their credit-building journey.

To start with, an employee needs to understand where their credit stands before they can work to improve their score.

• Credit Monitoring Solution

Credit monitoring services track changes to your credit reports and alert you about the changes. A credit monitoring service can help users know when fraudulent activity occurs so they can address it. Regularly monitoring credit reports can give them valuable insight into how the information affects their credit scores. 

Once they have tangible and usable insight into their credit situation, they can leverage the following solutions/products to help them on their path to financial stability. 

• Credit Builder Card

A credit builder card, also known as a secured credit card, is a type of credit card specifically designed to help individuals establish or improve their credit history by providing their own funds to establish a credit account with a lender. It's particularly useful for those with limited or no credit history, or those looking to rebuild their credit after financial challenges. As you use the card and make on-time payments, your payment activity is reported to the major credit bureaus (Equifax, Experian, and TransUnion). This consistent, positive payment history is a crucial factor in building and improving your credit score.

• Financial Coaching

A 2024 survey by Pew Research Center found that only about 54% of U.S. adults feel knowledgeable about personal finances. So nearly half of American adults lack the understanding of how to manage money, save, budget, manage debt or invest. However, by offering your employees financial coaching, they can learn the necessary skills to take charge of their finances. 

• On-Demand Pay

This financial wellness benefit offered by employers enables employees to access their already-earned pay before a scheduled payday to pay bills on time. The benefit can help workers avoid paying late fees and other associated penalties that can be costly and negatively-impact one’s credit rating. 

The likelihood is that a significant amount of your workforce has poor credit or no discernible credit. The negative connotations it brings most certainly can lead to financial stress, which is bad for them and bad for your business. Giving folks financial wellness tools that help them build credit can really make a difference in their financial security, and it's good for your business too.